What the mortgage calculator computes
A mortgage calculator that stopped at principal and interest would only tell you half the story. This mortgage calculator computes the full monthly housing payment — principal and interest, property tax, insurance, and (where it applies) PMI or Poland’s one-time low-down-payment premium, plus HOA fees on top. Lenders have a name for that full payment: PITI (Principal, Interest, Taxes, Insurance) — the number that shows what you’ll actually pay every month, not just the bank’s share of it.
Enter the property price, your down payment (as a percentage or a fixed amount), the annual interest rate, and the loan term, then pick a market — US, Poland, or other/global — and the calculator returns your monthly payment, loan-to-value ratio (LTV), total interest, and total loan cost. Advanced options add property tax, insurance, PMI or low-down-payment insurance, HOA fees, extra payments, and a simple affordability check (payment as a share of income).
It’s built for anyone financing a home: see exactly how your down payment changes PMI, what a smaller down payment really costs, and whether equal or decreasing payments suit you better.
How to use the mortgage calculator
- Pick a market. US, Poland, or other/global — this decides which fields (tax, PMI, low-down-payment insurance, HOA) appear and how extra costs are calculated.
- Enter the property price or appraised value.
- Enter your down payment — as a percentage of the price or as a fixed amount (toggle next to the field). The rest becomes the loan amount.
- Enter the annual interest rate and the loan term (in years or months).
- For Poland and the “other” market, choose the payment type — equal or decreasing (for the US market, the calculator always uses equal payments, matching standard US lending practice).
Advanced options add: property tax, homeowners insurance, HOA fee (US), PMI or low-down-payment insurance rate, extra payments (monthly or one-time, with a choice of effect), and an optional affordability check — what share of your income the payment takes up.
What is PITI: principal, taxes, insurance, and PMI
P&I (principal and interest) is the classic loan payment, calculated with the standard amortization formula — the same one behind our loan calculator: payment = loan amount × monthly rate ÷ (1 − (1 + monthly rate)⁻ⁿ), where the monthly rate is the annual rate ÷ 12 and n is the number of payments.
The rest of PITI:
- T — property tax. For the US market, you enter an annual rate as a percentage of the property value; the calculator divides it by 12 and adds it to the payment (lenders typically collect it together with the payment, through escrow). For Poland, you enter an annual tax amount instead — that field is informational only, because in Poland the bank doesn’t collect property tax as part of the loan payment; you pay it directly to the local authority.
- I — homeowners insurance, an annual premium divided by 12.
- PMI / low-down-payment insurance — added when your down payment is below 20% (more on this below).
HOA fees, common for US condos, aren’t part of PITI — the lender doesn’t collect them — but they do count toward your total monthly housing cost, which the calculator shows separately.
Example: a 300,000 property with a 20% down payment (US)
Property price 300,000, down payment 20% (60,000), interest rate 6.5%, term 30 years (360 payments), property tax 1.1% a year, insurance 1,200 a year.
- Loan amount: 300,000 − 60,000 = 240,000. LTV = 240,000 ÷ 300,000 = 80% — exactly at the threshold, so no PMI applies.
- Principal & interest (P&I): 1,516.96.
- Property tax, monthly: 300,000 × 1.1% ÷ 12 = 275. Insurance, monthly: 1,200 ÷ 12 = 100.
- PITI: 1,516.96 + 275 + 100 = 1,891.96.
- Total interest over the term: 306,106.77. Total loan cost: 240,000 + 306,106.77 = 546,106.77.
Down payment, LTV, and PMI
LTV (loan-to-value) is the loan amount divided by the property value. The bigger your down payment, the lower your LTV — and LTV decides whether you pay for low-down-payment insurance.
- US — PMI. With a down payment below 20% (LTV above 80%), lenders require PMI (private mortgage insurance), added to the payment every month. Example: a 360,000 loan on a 400,000 property (10% down, LTV 90%), PMI at 0.6% a year of the loan amount comes to 180 a month, pushing PITI to 2,821.71 instead of 2,158.38 for P&I alone. PMI ends automatically once the balance drops to 78% of the original property value (around payment 103 in this example, close to year 9), and you can request early cancellation at the 80% threshold from around payment 89 (close to year 8) — subject to your lender’s approval.
- Poland — a one-time low-down-payment premium. With a down payment below 20%, Polish banks may require a one-time insurance premium (UNWW), calculated on the amount still missing to reach the 20% threshold. Example: a 500,000 property, 10% down (50,000), LTV 90% — 50,000 short of the 20% mark; at a 4% premium rate that’s a one-time 2,000 (the typical market range runs 1,750–2,250, depending on the bank).
- No down payment (100% LTV) means either the maximum PMI cost on a conventional loan, or qualifying for a zero-down program (e.g. VA/USDA in the US, government-backed guarantees elsewhere).
At 20% down or more (LTV 80% or below), neither of these premiums applies — as in the example above.
Equal vs. decreasing payments
For Poland and the “other” market, you choose the payment type — for the US market, the calculator always uses equal (amortizing) payments, matching standard practice there.
Equal payments stay the same for the entire term — easier to budget for. Decreasing payments keep the principal portion fixed while interest is calculated on the shrinking balance — so the first payment is the highest, and it falls every month, but total interest ends up lower.
Important: with decreasing payments, the calculator’s headline PITI figure shows the first, highest payment — the real payment falls over time; the year-by-year schedule table shows the full trend.
Same loan — a 500,000 property, 20% down (400,000 loan), 7.5% rate, 25-year term (300 payments) — calculated both ways:
- Equal payments: a fixed 2,955.96 a month, total interest 486,789.41, total cost 886,789.41.
- Decreasing payments: a first payment of 3,833.33 (falling every month after), total interest 376,250, total cost 776,250.
That’s over 110,000 less in total interest with decreasing payments — at the cost of a much higher first payment.
Extra payments: paying off faster and dropping PMI sooner
Extra payments (monthly or one-time) go straight to principal. You choose the effect: shorten the term (payment unchanged, the biggest interest savings), lower the payment (term unchanged, lower monthly cost), or lower the payment but keep paying the old amount (mathematically identical to shortening the term, with the flexibility to pay less in a tight month without breaking your loan terms).
Extra payments have a second effect when PMI is involved: they cut the balance faster, so PMI ends sooner. Example: a 360,000 loan (90% LTV, 0.6% PMI) with a 500 monthly extra payment and the “shorten the term” effect:
- Total interest drops from 417,017.48 to 242,522.45 — a saving of 174,495.03.
- The loan is paid off 133 months (over 11 years) earlier.
- PMI ends after about 4 years instead of roughly 8.58 years without the extra payments.
Mortgage calculator vs. loan calculator
A mortgage is secured by the property, so lenders offer lower rates and longer terms (up to 30–40 years), but require a down payment, track LTV, and may add PMI or low-down-payment insurance. The payment isn’t just principal and interest — it’s the full PITI.
A personal (unsecured) loan isn’t backed by any asset — so rates are higher and terms shorter, but the payment is simpler: just principal and interest, with no tax, insurance, or PMI layered on top. To run the numbers on that kind of loan — or to model extra payments on an existing personal loan — use our loan and overpayment calculator.
This calculator computes your payment only from the numbers you enter — it’s an educational, estimate-only tool, not a loan offer. Actual PMI, UNWW, fee, and insurance terms depend on your specific lender, and property tax and insurance rates change year to year and vary by location — treat the result as a starting point for a conversation with your lender, not a final offer.